B&E: The Indian government is on the disinvestment mode for the last one decade now. What is your perspective on the need for disinvestment?
Dr.V. Krishnamurthy (VK): Personally, I hold a different view. There are things, which the government need not do, but there are certain basic services, which cannot be left to market forces. In many respects, we are suffering by leaving it to market forces in sectors like defence production and heavy industries. How do you explain the fact that 60% of power equipments are now being imported from China? Earlier, we used to produced around 80% of the machinery. Today, it has come down to 30%.
B&E: But the government also supports cheap imports, doesn’t it?
VK: Their argument is that why should we protect Indian industries if they are not competitive. There is no level playing field. Internal reforms are taking a long time and the Indian industry is at a disadvantage. Also, the import tariff has been cut down to zero from 5%. Investment is lagging behind, which is not good and the private sector is not going to be interested. The state must intervene and cannot abdicate its responsibility.
B&E: What have been the recommendations from NMCC to strengthen the Indian PSUs?
Dr.VK: The NMCC does not distinguish between private & public sector or Indian & foreign. They want value addition in India done by any of them. As per our studies, leaving everything to market forces as in strategic sectors is not getting adequate attention. So we are saying that the government has a role. Whether in public or private, resources have to be conserved. Don’t sell raw material. Add value to it. Acquire natural assets abroad. The NMCC’s objective is to improve the competitiveness of the Indian economy. We didn’t follow the Soviet style of everything with the government. The government allowed the private enterprise to act unfettered. But the government should not feel that everything will be taken care of by the private sector. We are gradually sensitising everybody that there is a role for the government and it should be played by the government.
B&E: Do policy makers realise this imperative now?
Dr.VK: It is coming through, arising out of the current situation in US and Europe where the economy that has depended on market forces has not fared well.
Dr.V. Krishnamurthy (VK): Personally, I hold a different view. There are things, which the government need not do, but there are certain basic services, which cannot be left to market forces. In many respects, we are suffering by leaving it to market forces in sectors like defence production and heavy industries. How do you explain the fact that 60% of power equipments are now being imported from China? Earlier, we used to produced around 80% of the machinery. Today, it has come down to 30%.
B&E: But the government also supports cheap imports, doesn’t it?
VK: Their argument is that why should we protect Indian industries if they are not competitive. There is no level playing field. Internal reforms are taking a long time and the Indian industry is at a disadvantage. Also, the import tariff has been cut down to zero from 5%. Investment is lagging behind, which is not good and the private sector is not going to be interested. The state must intervene and cannot abdicate its responsibility.
B&E: What have been the recommendations from NMCC to strengthen the Indian PSUs?
Dr.VK: The NMCC does not distinguish between private & public sector or Indian & foreign. They want value addition in India done by any of them. As per our studies, leaving everything to market forces as in strategic sectors is not getting adequate attention. So we are saying that the government has a role. Whether in public or private, resources have to be conserved. Don’t sell raw material. Add value to it. Acquire natural assets abroad. The NMCC’s objective is to improve the competitiveness of the Indian economy. We didn’t follow the Soviet style of everything with the government. The government allowed the private enterprise to act unfettered. But the government should not feel that everything will be taken care of by the private sector. We are gradually sensitising everybody that there is a role for the government and it should be played by the government.
B&E: Do policy makers realise this imperative now?
Dr.VK: It is coming through, arising out of the current situation in US and Europe where the economy that has depended on market forces has not fared well.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
